If you want to understand everything relating to credit card cash withdrawal, you’re in the right place.
Credit cards have slowly garnered immense popularity around the world and today, they are of the best financial tools available in the market. They offer great benefits in the form of discounts, cashbacks, reward points etc., however, every time you make a credit card withdrawal, you are liable to pay interest charges.
Think of it as an advance fee that you need to pay in order to enjoy the instant cash benefit. These interest charges significantly vary depending on the card type and issuer. For example, Bajaj Finserv RBL Bank SuperCard is an amazing credit card with pretty affordable interest charges.
Let’s understand what credit card cash withdrawal is and how to check if you are eligible for the said benefit:
Credit card cash withdrawal, often called credit card cash advance, is how credit cardholders can withdraw cash using their credit cards from an ATM. However, the amount of cash that can be withdrawn is limited and it must be repaid in time, along with the interest charges.
Whenever you make cash withdrawals using credit cards, you will need to pay the credit card cash advance as well. But credit card cash withdrawal terms and conditions with the issuer. Usually, the interest rates are between 2.5-3%.
It is recommended to keep an eye on the credit card statement to know exactly how much you are spending in the form of interest.
For every credit card cash withdrawal, there is a finance charge. The finance charge will vary depending on the monthly withdrawal amount. However, the monthly percentage rate will vary until the transaction is completely fulfilled. Every bank has its own set of criteria for charging financial charges. It is advisable to consult your issuer before making any decision.
Apart from the internal factors, there are certain external factors to consider too. These play an essential role in managing your credit card. Some of the common factors that will affect the interest rate include repayment behaviour, card usage, card advances, and more. Several issuers also have a few eligibility criteria that you must fulfil in order to be able to enjoy credit card cash withdrawals.
The eligibility criteria for credit card cash withdrawal include the following:
People under the recommended age limit, cannot apply for and aren’t issued credit cards in the first place. However, there are certain additional age criteria that the cardholders must fulfil. These vary from issuer to issuer, and it is best to check with your issuer what their criteria are before making any decision.
The existing and outstanding credit card limit will determine the eligibility for credit card cash withdrawals. Cardholders cannot withdraw any cash in excess of the predetermined limits. These too vary with the card type and the issuer, making it important to consult your issuer in order to avoid any extra fees or penalties.
If you are repaying the loans, paying your credit card bills on time and constantly using your credit card, your credit score will be high, making you eligible for all the credit cards benefits, including credit card cash withdrawals.
Most people who have only recently started using credit cards are unaware of the fact that they can withdraw cash using credit cards. Well, believe it or not, but withdrawing cash with credit cards is as simple as withdrawing cash using debit cards. You just need to make sure that the ATM you are using allows credit card cash withdrawals.
Additionally, before stepping into the ATM to withdraw cash, you need to check the fees, terms and conditions, and all the associated charges in advance. Several ATMs charge extra for making withdrawals using credit cards.
It depends on the card issuer. In order to determine if credit card cash withdrawal will affect your credit score or not, talk to your relationship manager. Even if it doesn’t affect your credit score directly, the high amount of interest charged by the bank adds to the financial burden, making financial mismanagement likely, indirectly affecting your credit score.
If you fail to pay the due amount, not only will your credit score be negatively impacted but it will also reflect in your monthly credit card statement. Both these things can hamper your chances of getting a loan in the future.
If you’re planning on making a credit card cash withdrawal, it is always recommended to check with the issuer for terms and conditions. Knowing the basics will help to ensure seamless transactions in the long run.